Great American Group Announces Third Quarter 2013 Financial Results

WOODLAND HILLS, CA--(Marketwired - Nov 14, 2013) - Great American Group, Inc. (OTCBB: GAMR) ("Great American Group" or the "Company"), a leading provider of asset disposition and auction solutions, advisory and valuation services, capital investment, and real estate advisory services today announced financial results for its third quarter ended September 30, 2013.

For the third quarter ended September 30, 2013, the Company reported total revenues of $21.8 million, an increase from $14.2 million in the third quarter of 2012. Revenues from services and fees increased to $11.4 million, compared to $11.0 million in the same period the prior year. Revenues from sale of goods were $10.4 million, compared to $3.3 million in the third quarter of 2012. The increase in revenues during the quarter was primarily due to an increase in revenues from the sale of goods in the auction and liquidation segment which increased by $7.1 million, to $10.4 million, from $3.3 million in the prior year quarter. The increase in revenues from the sales of goods primarily related to the sale of four oil rigs under a sales type lease in the amount of $9.3 million during the third quarter of 2013.

"Our third quarter 2013 revenues increased to $21.8 million and we had net income of $0.4 million or $0.01 per diluted share. This was a decrease from the net loss we reported of $0.6 million or $(0.02) per diluted share in the prior year's quarter," said Andrew Gumaer, Chief Executive Officer of Great American Group. "During the third quarter, we experienced a slight increase in business activity in our auction and liquidation segment as we were engaged on a number of retail liquidation engagements including the liquidation of 17 Orchard Supply Hardware stores as part of the bankruptcy sale to Lowe's. We are still working on these engagements at the end of the quarter and they should contribute favorably to our operating results in the fourth quarter."

Direct cost of services in the third quarter was $5.6 million, compared to $4.8 million a year ago. Cost of goods sold was $8.2 million, compared to $2.2 million in the third quarter of 2013. Selling, general and administrative expenses were $7.1 million, compared to $7.9 million in the third quarter of 2012. The decrease in selling, general and administrative expenses was primarily due to a decrease in selling, general and administrative expenses of $0.3 million in the auction and liquidation segment and a decrease in selling, general and administrative expenses of $1.0 million in the UK retail store segment; offset by a increase in selling and administrative expenses of $0.5 million in the valuation and appraisal segment. Corporate expenses remained flat at $2.4 million during each of the third quarter periods ended in 2013 and 2012.

Interest expense during the third quarter of 2013 was $0.6 million, a decrease from $0.7 million in the comparable prior year quarter. Interest expense in the third quarter of 2013 included $0.5 million of interest expense on the notes payable to the Great American Members and Phantom Equity holders, and $0.1 million of interest expense on our borrowings under the Company's revolving credit facility and letter of credit fees and amortization of deferred loan fees on our asset based credit facility.

Operating income for the third quarter of 2013 was $0.8 million, compared to an operating loss of $0.7 million during the third quarter of 2012.

Income before income taxes was $0.1 million compared to a loss before income taxes of $1.1 million in the third quarter of 2013. Net income in the third quarter of 2013 was $0.4 million compared to a net loss of $0.5 million for the third quarter of 2012. Diluted net income per share was $0.01 in the third quarter of 2013 compared to diluted net loss per share of $(0.02) in the third quarter of 2012.

Financial PositionAt September 30, 2013, the Company had $14.0 million in cash and cash equivalents and $2.5 million of restricted cash.

Conference CallThe Company will host a conference call today at 4:30 p.m. ET, to discuss results for the third quarter ended September 30, 2013. To participate in the live event by telephone, please dial 1-877-407-0789 ten minutes prior to the start time (to allow time for registration) and use conference ID #13572817. International callers should dial 1-201-689-8562.

The call will also be broadcast live over the Internet and may be accessed on the Investor Relations section of the Company's website at www.greatamerican.com.

For those unable to participate during the live broadcast, a replay will be available at 7:30pm ET on November 14, 2013 and will run through November 21, 2013, at 11:59pm ET. To access the replay, dial 1-877-870-5176 (U.S.), and use conference ID #13572817. International callers may dial 1-858-384-5517 and enter the same conference ID number. A replay of the call will also be available for 90 days on the Company's website at www.greatamerican.com.

Great American Group is a leading provider of asset disposition and auction solutions, advisory and valuation services, capital investment, and real estate advisory services for an extensive array of companies. A trusted strategic partner at every stage of the business lifecycle, Great American Group efficiently deploys resources with sector expertise to assist companies, lenders, capital providers, private equity investors and professional service firms in maximizing the value of their assets. The company has in-depth experience within the retail, industrial, real estate, healthcare, energy and technology industries. The corporate headquarters is located in Woodland Hills, Calif. with additional offices in Atlanta, Boston, Charlotte, N.C., Chicago, Dallas, Melville, N.Y., New York, Norwalk, Conn., San Francisco, London, Milan and Munich. For more information, call (818) 884-3737 or visit www.greatamerican.com.

Forward-Looking StatementsThis press release may contain forward-looking statements by Great American Group that are not based on historical fact, including, without limitation, statements containing the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions and statements. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied by these forward-looking statements. Such factors include those risks described from time to time in Great American Group's filings with the SEC, including, without limitation, the risks described in Great American Group's proxy statement/prospectus filed with the SEC on May 16, 2013, and its Annual Report on Form 10-K for the year ended December 31, 2012. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and Great American Group undertakes no duty to update this information.

Note Regarding Use of Non-GAAP Financial Measures Certain of the information set forth herein, including Adjusted EBITDA, may be considered non-GAAP financial measures. Great American Group believes this information is useful to investors because it provides a basis for measuring Great American Group's performance against the contingent share earnout provisions in the AAMAC transaction. In addition, Great American Group's management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating Great American Group's operating performance, capital resources and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-financial measures as reported by Great American Group may not be comparable to similarly titled amounts reported by other companies.